For the first time, the Chinese integrated energy and chemical company, SINOPEC, also known as the China Petroleum and Chemical Corporation, will have its range of lubricant oils produced in Singapore. The first barrel of SINOPEC lubricant oil was released on June 2007, and marked the start of Singapore and SINOPEC's collaboration to provide the latter’s products to consumers in the Asia-Pacific region.

The lubricant oils originate from China's aerospace and science technology sector. Developed for specific purposes, they are widely and successfully applied to different fields, including aerospace, automobile, machinery, metallurgy, petro-chemistry and electronics. In particular, they are the official oil for China's manned spacecraft, which require highly unique products because they face extremely severe conditions such as large temperature differences, strong oxidation and high radiation. SINOPEC's products will also be used on components of China's first lunar satellite, which will be launched in the second half of this year.

"When we decided to enter the Asia-Pacific market, Singapore was chosen as the site for the launch of our product because we regard Singapore as the region's economic centre and its connectivity will create awareness of our company and products within the region," says Song Yun Chang, Chief Executive, Sinopec Lubricant Company.

ItalSing Petroleum Company (ItalSing) and AP Oil International (AP Oil), two of Singapore's most established manufacturing companies, have been chosen to produce SINOPEC's lubricant products. They will take charge of the processing and manufacturing of the Chinese company's lubricant products with the raw materials and technologies supplied by SINOPEC. ItalSing and AP Oil were both chosen as part of SINOPEC's decision to leverage Singapore's manufacturing capabilities. Production volume of the lubricants by the Singapore-based companies for the Asia-Pacific market is estimated to range between 5,000 and 7,000 tonnes a year.

Making inroads

SINOPEC first entered Singapore in the 1980s when it set up an office to handle its trading function. Since then, it has steadily increased its presence over the years, subsequently developing into an international marketing outpost leveraging Singapore's extensive international network and connectivity. With this new investment, Singapore will be the company's base to develop brand equity and product manufacturing - which, in turn, will spur the growth of Singapore-based companies.

"Singapore is indeed honoured to be chosen by SINOPEC for the launch of its new line of lubricant products and be part of its branding programme for the international markets. Singapore's operation is also significant as it is the first offshore manufacturing base for SINOPEC. We are proud that this range of global products is 2007Made-In-Singapore," says Chua Taik Him, Assistant Managing Director, Singapore Economic Development Board (EDB), at the inaugural launch.

With this new investment, Singapore will be the company's base to develop brand equity and manufacture its products - which in turn will spur the growth of Singapore-based companies.

Looking ahead

EDB is also looking to further encourage SINOPEC to consider setting up its regional HQ, manufacturing and R&D activities here in Singapore. Adds Chua, "With more than 2,300 Chinese companies now based here, there will be economies of scale to broaden the business value chain and synergies amongst the multinational companies based here. We look forward to continue exploring new opportunities together with investors and facilitate the necessary execution."

Undeniably, SINOPEC's entry into an Asian market dominated by giants such as Shell and Exxon-Mobil are making industry watchers sit up and take notice. SINOPEC is China's largest lubricant producer, and the fourth largest in the world, ranking 23rd in the world’s Top 500 enterprises. Its lubricants, which have grown to become one of the leading brands in Asia, are sold in over 20 countries across Asia, Africa, Europe and the Americas. It is also China's second largest crude oil producer.

With this partnership in place, both parties would stand to benefit from each other's strengths. By entering into the diverse and flourishing petrochemicals industry in Singapore, SINOPEC is a welcome addition and will undoubtedly aid in the nation's economic growth.